San Miguel keeps bank if CIMB walks away

MANILA: Philippine conglomerate San Miguel Corp is willing to keep its
banking arm if Malaysia's second-largest lender, CIMB Group Holdings
Bhd, walks away from a deal worth nearly US$300 million for a 58 per
cent stake in the bank, its president said on Tuesday.

Ramon
Ang, San Miguel president, told reporters that CIMB was expected to
make a decision within the next week or two on whether to pursue its
plan to acquire a majority of the unlisted Bank of Commerce.

"We
already agreed on the price, terms, long time ago. In fact, they are
already involved in the business. But, somehow, I don't understand why
it is taking a lot of time for them to close," Ang said.

He
added that "small" issues related to the bank's IT infrastructure and
property holdings were delaying closure of the deal. Foreigners are not
allowed to own real estate in the Philippines.

CIMB and San
Miguel signed an initial agreement a year ago that valued 58 per cent
of Bank of Commerce at nearly US$300 million, reflecting a
price-to-book ratio of 1.14 as of the end of 2011. CIMB said at that
time the valuation was expected to rise to an effective ratio of about
1.3 times after the sale.

The deal would signal CIMB's entry
into the Philippines as part of its Southeast Asia push and would
provide conglomerate San Miguel more funds to deploy for acquisitions
and expansion.

San Miguel wants to sell the bank because it is
not part of its core business strategy. Its stake in the bank is held
by subsidiaries San Miguel Properties Inc and San Miguel Retirement
Fund.

But Ang said the conglomerate could grow the bank on its own with the country's strong economic growth.

"If
they walk away, we have no problem keeping it," Ang said. "It's a good
investment. If the deal pushes through, it's okay. If it will still
take time and I have an option, I'd rather keep it." Bank of Commerce
had total assets valued at nearly 93 billion pesos at the end of
2012.-- Reuters